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15 November 2016Written by Henry Lane

Thorgills October market insight

Welcome to Thorgills’ October market insight, which offers a brief synopsis of the sales and lettings markets of West London. With winter firmly on it's way market activity begins to shift, as we say goodbye to the window shoppers and welcome in the serious buyers and tenants.

As the nights draw in, those in the property industry feel a mixture of emotions. It is harder to persuade those looking for a new home to come out on a cold, rainy evening to view properties which can make it harder for agents to agree deals in the last quarter of the year. However, the exciting flipside to this is that those people who make the effort are already demonstrating how keen they are to find a property, so the number of viewings required before an agreement is reached is much lower. This in turn makes the whole process more efficient for landlords, sellers and agents alike.

The sales market has had a tough year so far, with the introduction of a higher stamp duty rate for buyers of additional homes, and the economic uncertainty surrounding the EU referendum. Some of those planning to make their first buy-to-let investment in London may well have been deterred by the stamp duty hike as it would have eaten into their already tight profit margins, however seasoned investors have not been put off as they have longer term capital growth in mind. In the lead up to the referendum and in the cooling off period afterwards the behaviour in the sales market was akin to a small traffic jam caused by everyone braking slightly more than the person in front of them, before picking up speed again. London sales prices have proved to be more resilient than expected, with robust growth month on month since the referendum. The difference is that fewer properties have changed hands, since those buyers whose decision to change home was not time-sensitive have chosen to postpone the move for now. House prices in London are now 10.9% higher than they were at this time last year which, given the financial and political climate, is quite impressive.

London rental prices, on the other hand, are at the lowest they have been since the financial crash of 2008. This is in part due to the much needed boost to the number of new homes being built across the capital, which has had the knock-on effect of saturating the lettings market. Landlords need to maintain a competitive edge when prospective tenants are presented with such a variety of properties to choose from. Some variables, such as the location and size of the property, a landlord can do nothing about, however others, such as being flexible on the length of the tenancy, the furnishings in the property, and adding extras such as high speed internet, high-end audio-visual systems and allocated parking spaces can really help to entice the right tenant to sign up. Some bulk investors may have maximum rental return as their primary objective, whilst others, including so-called 'accidental landlords' who have inherited a property or have been able to hold onto a previous home thanks to low interest rates, are perhaps equally keen to find a trustworthy tenant who will look after their property. Whatever the status of the landlord, prospective tenants are in a good position to be able to choose the right property that suits their requirements well, and are therefore more likely to arrange a longer, more secure tenancy which is great news for landlords.

As we approach Christmas, the lettings and sales markets traditionally step down a gear, as the interest in moving around the festive season dwindles. However, sales that are already underway are being worked on intensively to ensure that everyone can be in their new homes before the Christmas break, and for those Londoners who don't celebrate Christmas, it's still business as usual as they seek a new property to buy or to rent. So there's a great deal of new instructions to win, deals to agree and hard work to be done before we put up our Christmas tree just yet!